One of the most rewarding aspects of my job is working with some of the brightest thought leaders in global investing, and particularly the financial advice profession.
One of those thought leaders is MARK NAGLE, an Englishman who emigrated to Australia at the turn of the Millennium and now runs Treysta Wealth Management, one of the country’s most successful and innovative advice businesses.
Here Mark relates his experiences, explains what it is that makes Treysta different, and gives his opinions on the way that financial advice is evolving Down Under.
RP: Mark, you’re a Pom living in Australia, and you’re married to an Australian. When and why did you decide to emigrate?
MN: I was working in a family business with my Dad. I think Dad would never have stopped working, so I decided it would be sensible to sell the business and ease him into retirement. I didn’t know what I was going to do next, and then I had a chance meeting with a friend of a friend who lived in Sydney. He asked if I’d ever considered emigrating to Australia. I think I literally laughed and said, “Why would I want to do that?” But I’d always loved to travel and I’ve always had a passion for trying new things, and that conversation stirred something in me. Eventually I accepted an invitation to go to Sydney in November 2000.
I got lucky and flew into Sydney on a crystal-clear morning. Looking down from above I think I fell in love with this amazing city in that moment — the blue of the ocean set against the green of the bushland, the iconic harbour bridge and the opera house. To this day, if I have a visitor flying in, I always keep my fingers crossed that they get as lucky as I did that first morning.
My host lived in the beautiful suburb of Balmoral on Sydney’s north shore. His office was in Circular Quay, the hub for Sydney’s ferries in the heart of the city. The routine for my ten-day visit oscillated between those two places. What was there not to love? Sydney had just hosted the Olympics and it had a confident and positive air about it that was infectious.
I had three young sons, aged11,10 and 4. I looked at society and life in Sydney and thought it would be a special place for them to grow up. As I flew out of Sydney my priority was to get back here with my then wife and sons as soon as possible. We arrived back in Australia as a family in May 2001.
RP: Financial planning isn’t your first career. How did you find your way into it?
MN: I originally came to Australia to participate in what was then a vibrant mortgage market. The mortgage industry was significantly more sophisticated in Australia than it was in the UK at that time. While the mortgage space was interesting, my employer had worked out that I might just be the guy to kick off their sleepy financial planning business. I thought, “Sure, why not?”. So I spent the next year or so getting my Graduate Diploma in Financial Planning and that was that.
RP: Tell me about Treysta Wealth Management and its core values.
MN: Treysta Wealth Management is a great little business that has been built by understanding where our true value as advisers lies — and, even more importantly, where it doesn’t. We then set out to create a business model that allows our company’s resources to be focused on delivering real and sustainable value to our clients.
The clients win because we deliver improved and more consistent outcomes for them, and Tresyta wins because we have a scalable and efficient business that is relieved from the burdens of low- or no-value complexities which block up so many businesses’ potential. That, in turn, allows us to deliver high-performance commercial results.
Our core values are openness, curiosity, caring, courage and vitality.
Openness means being open with each other as a team and also with our clients. We share our own personal journeys with our clients. We find that clients will be more open with us if we are open to them.
We love looking at new ideas and new ways of doing things. We know curiosity killed the cat, but we always want to make sure we know where the ball’s going.
We have a small team and we all look out for each other, and that culture extends to our clients. We would all send our Mums here. We work hard at demonstrating high levels of care and our team are tuned into listening to what’s coming up in clients’ lives and responding to those events.
If we need to change something we have the courage to do it. No Luddites here! And finally there’s vitality. The health of our team is very important. We all try and exercise and eat well and maintain high levels of energy. We also encourage our clients where appropriate to look after their health and to live happy and full lives.
RP: You’re a strong advocate of what is often called financial life planning. Why is that?
MN: I guess this goes back to the last point. We worked out where our value as advisers really lies, and that’s in helping people identify what’s most important to them. They can then re-evaluate how they make financial and life decisions, which in turn gives our clients the power to understand how they can best use their money to support the lives they really want to live. The concept is obvious and simple, but we needed to completely rethink the advice process and create a repeatable and consistent process to deliver it.
RP: As a company you’ve been working closely with the University of Sydney. How beneficial has that been?
MN: We’ve always been strong advocates of the teachings of behavioural economics, which have been woven into our advice process. And yes, we’ve partnered with a psychologist from University of Sydney Business School to help us with this work.
It’s a mutually beneficial relationship. For us it was important to put an academic stamp on the work that we were doing. It also enabled us to get a view of the traditional advice process from outside of the industry. We deconstructed the traditional process and reassembled it from a psychological and behavioural perspective. It resulted in a better design, one with our clients at the centre, and it made the process more engaging and relevant for them.
Although the industry has tried to make progress in different areas, I think it has largely continued to put new coats of paint on the existing surface. We stripped things back to natural timber and started again.
The University has benefited from the data they have been gathering about our journey, and this information can be used to evolve and enhance their own degree modules. The University and Treysta have also embarked on a joint study which seeks to measure the results that clients receive from our process relative compared to those who use a more traditional advice approach.
RP: For the investment piece you rely on Implemented Portfolios — a company that’s based in the same building as Treysta. Why is that the right solution for you?
MN: We figured that advisers are not the best people to be “running the money” for clients. We prefer our advisers to spend their time with clients, not studying Bloomberg screens. It’s a very different skill set. We train them to be great at helping their clients be better investors, helping them manage their emotions and helping them stay on track to meet their objectives. Our advisers of course need to communicate the investment philosophy very well, but what they should not be doing is assembling and managing portfolios or making asset allocation decisions.
To facilitate this we utilise the services of Implemented Portfolios. Essentially it provides an Individually Managed Account, or IMA, service which we can access on behalf of our clients. The IMA structure provides for fully customisable individual client accounts, and we use five risk-based investment programs, which are deployed using passive ETFs.
RP: I know you’ve started working with my colleagues at Regis Media on video content. Why is Treysta so committed to investor education? And what part do you see content and social media playing in that?
MN: Our interaction with Regis has been first class and it’s a relationship we wish to further develop. Investor education is paramount in the long-term investment returns experienced by individual investors. Significant investment performance is lost by Mums and Dads because they respond to newsfeeds or emotions or crowd mentality. It’s this stuff that’s really damaging to long-term wealth creation. If we can help our clients become more informed and help them retain focus on achieving their objectives as the only relevant benchmark, we will have done them a great service.
I think content and social media are indispensable components of our business toolkit when it comes to client and consumer education in general. The market for financial advice is still a complex place in Australia, and our consumers don’t fully understand the landscape, so it’s really tough for them to make informed choices when looking for an adviser.
I know Regis Media works with some like-minded businesses in Australia, and if we can collectively help educate our consumers to understand their advice options, we will have done a valuable thing.
RP: This is a fascinating time for financial advice and financial planning globally. What are the biggest issues facing the profession in Australia specifically right now?
MN: I think cost to serve is at the top of the agenda, with increased compliance and the need to deliver our services to younger Australians at an affordable price particularly big issues.
We have a Royal Commission into our “big four” banks, much of which will centre around their financial advice activities, so everyone’s keeping a keen eye on that.
We have a body called FASEA, the Financial Adviser Standards and Ethics Authority, which has been charged with defining the new minimum education requirements for advisers. It’s really hard to get clarity around what that looks like, but it’s possible we’ll see a mass exodus of older advisers. The intent is genuine but the process has been dreadful and right now there’s a lot of ambiguity, which is damaging.
The other big issue, of course, is technology. Most firms are struggling to find the perfect technology stack.
RP: Finally, you’ve recently been in California with some of other Australian advisers. What was the aim of the trip? And what did you learn?
MN: Yes, we’re involved in a group of thought leaders from across the profession, and we try to go on a trip every 12 or 18 months. The aim is to take time out of our everyday work and give ourselves the mental freedom to think about our businesses. This year’s content varied from visiting Ideo, a global design and innovation company, to attending a lecture on Behavioural Economics by Professor Shachar Kariv at UC Berkeley. We saw an array of office cultures, ranging from Facebook to Salesforce. We also observed wildly different cultures within the investment industry, with visits to BlackRock and FutureAdvisor.
We spent time as well at Yodlee, which is an offshoot of Envestnet that runs financial data aggregation solutions, and we heard from two fintech start-ups from their incubator programs. One was an app to help you run the finances of aged or dependant parents, and the other helps property investors manage all the financial transactions relating to their investments.
The key take-away from the trip for me was that it’s going to be very important to manage decision making in a rapidly changing environment, and also that technology is going to be paramount — particularly artificial intelligence and machine learning.
Oh, and I met with a friend of Regis Media, Mark Hebner, who as you know runs an incredible RIA in Irvine. What a great guy Mark is, and what a fascinating business he has in Index Fund Advisors!